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MIKE THE KNIFE

Ontario's new premier has a mandate to cut taxes and slash government

MIKE THE KNIFE
MARY JANIGANJune191995

MIKE THE KNIFE

Ontario's new premier has a mandate to cut taxes and slash government

MARY JANIGANJune191995

MIKE THE KNIFE

Ontario's new premier has a mandate to cut taxes and slash government

CANADA/COVER

MARY JANIGAN

It was, as Mike Harris always predicted, nothing less than a revolution. In his Tory pin-striped suit, against a Tory-blue backdrop, the Conservative leader carefully repeated the promises that had just swept him to victory in Canada’s most populous province—and which would undo much that the governing New Democrats had done. He would cut welfare benefits, scrap employment equity, repeal prolabor legislation, slash spending and cut taxes. For a wealthy, influential province that has generally embraced moderate, middle-of-the-road solutions, Harris’s goals represented a breathtaking turn to the right. The sheer enormity of the shift seemed to overwhelm even the premier-designate. Standing before his campaign slogan (“Common Sense. For A Change.”), addressing an ebullient crowd at a hall near his North Bay home, Harris confessed: “Some may call us victorious. In truth, § we are fortunate to have been honored with your trust.” Then, 3 he pointedly added: “You have voted for major change. Your I mandate is a direct action to fix a government that isn’t working | for you any more.” y

The results indeed signalled a major change for the formerly § staid Ontario. In a province where the Progressive Conservau fives held power for 42 years, from 1943 to 1985, voters have recently switched allegiances with an abruptness that could cause whiplash. Five years ago, they awarded a majority to Premier Bob Rae and his New Democratic Party, tossing the Liberals out of office. Last week, Harris swept 82 of the 130 seats in the legislature, capturing 45 per cent of the popular vote. The Liberals, who had entered the election with a whopping lead in the polls, dropped to 30 from 34 seats, with 31 per cent of the vote. And, although Ontario’s first socialist premier held his Toronto seat, the NDP plummeted to 17 seats—and a mere 20 per cent of the vote. The outcome was eloquent testimony to the toll that the recession has taken on the confidence and tolerance of voters. “This is goodbye to the age of the presumption of prosperity, and welcome to the age of anxiety and change,” says pollster Michael Adams, president of Environics Research Group Ltd. “If politics and politicians in Ontario were once bland, bland is no longer grand.”

Ontario’s decision has deep implications for the Liberal government in Ottawa and for the nine other provincial governments. Harris has promised to cut provincial income tax rates by 30 per cent over the next four years—and he has vowed to resist, with ferocity, any federal

attempt to divert those savings to its own coffers. Those threats will strengthen federal Finance Minister Paul Martin as he attempts to resist his cabinet colleagues’ desire to balance budgets with tax increases. Harris has also vowed to restore Ontario’s competitive position among the other provinces. He has promised cuts in payroll taxes, labor law changes and a five-year freeze on hydro rates. By 1998-1999, if he keeps to his agenda, the province’s personal income tax rate will be the lowest in Canada. And Harris has vowed to join Ottawa in merging the provincial sales tax with the federal sales tax, eliminating costly paperwork. Taken together, those changes could impose greater discipline on other provinces, notably Quebec, which have been slow to tackle their budget deficits. “I hate to sound like an arrogant Central Canadian but Ontario is Broadway—and these ideas are hitting Broadway,” says Tory campaign chairman Tom Long. “If we can prove that it is possible to have a smaller government, with a more private-sectororiented approach, that it is possible to un-legislate, it will have national implications.” Long adds that Harris has great admiration for premiers such as New Brunswick’s Frank McKenna, who have already tackled their debts.

Most important, the Ontario election results put all governments on notice that the public mood has shifted dramatically to the right. Pollster Adams says that Harris cobbled together a coalition of three groups: disgruntled small-town voters who are dismayed by the pace and scope of social change; suburban voters who fear for their jobs, have watched their purchasing power plummet and want tax relief; and the so-called Red Tories who espouse a more traditional blend of fiscal rectitude and progressive social policies. Rallying behind Harris, those three groups supported the Tory promise to pare government, cut taxes and balance the books. “People are saying that if all these fancy economic theories don’t work, then the theory I understand is the theory of household economics: you don’t go to the bank to borrow for a trip to Florida,” observes Adams.

But key elements of that disparate coalition were also drawn to the Tory’s pivotal social promises, espe-

During the Ontario election campaign, premier-designate Mike Harris won votes with promises to roll back several policies implemented by the defeated New Democratic government. Among the targeted programs:

EMPLOYMENT EQUITY:

The NDP’s Bill 79 requires public-sector employers with more than 10 workers, and private firms with more than 50 employees, to establish hiring targets for women, visible minorities, the disabled and aboriginals. Harris vowed to repeal the law, abolish the commission that oversees the program and transfer a portion of its $9.3-mil!ion budget to the Ontario Human Rights Commission.

LABOR LAW: The Rae

government passed Bill 40 in 1992, banning the use of replacement workers during strikes and making it easier for unions to sign up new members. Harris pledged to rescind the law and remove many pro-union officials on the Ontario Labor Relations Board.

WELFARE: Under the

NDP, welfare benefits increased by about 15 per cent—-to a total budget of $6.3 billion for 1995-1996— while the province’s caseload almost doubled to 1.3 million people. Harris said he would reduce benefits by about the same amount and introduce workfare”—requiring what he called “able-bodied” recipients to enrol in work and training programs.

ADVOCACY COMMISSION:

Another NDP creation, the $30-million-a-year agency enforces legislation promoting the rights of young people, nursing-home patients and others. The Tories have pledged to abolish it.

dally the pledge to institute radical changes in the welfare system. Harris has promised to cut $2.25 billion from the $6.3-billion annual social assistance budget, reducing benefits to 10 per cent above the national average. He would also require all so-called able-bodied recipients, with the exception of single parents with young children, to work or to retrain in order to qualify for benefits. He has promised to repeal NDP legislation that banned the use of strikebreakers in labor disputes. And he has vowed to scrap the employment equity law that requires private companies with 50 or more employees to establish hiring targets for visible minorities, aboriginals, disabled people and women—or face a maximum fine of $50,000. As candidates from all parties reported, many voters still harbored resentful memories of a provincial job advertisement in the Ontario public service publication Job Mart in 1993 for a management board position that flatly excluded white English-speaking males.

Such actions could further strain the social fabric of Ontario, and perhaps the Tory party itself, when Harris summons the legislature for a summer session. Although gracious in defeat, Rae elicited lengthy applause from his Toronto partisans when he pointedly observed: “We refused to single out the poor and the needy for punishment.” Liberal Leader Lyn McLeod was more oblique—but her meaning was clear: ‘We will continue to offer a vision of a humane and compassionate society, a society that has a place in its heart for everyone.” Strategists for both leaders concluded that many voters were feeling hard-pressed, ill-treated and perhaps meanminded. Says former NDP federal secretary Gerald Caplan: “My personal complaint is that the voters have bought a bill of goods which says that, by beating up on others in worse shape than themselves, their plight will be improved. I think it is unpleasant madness.”

But there is little doubt that the Tories have a mandate to do what they have promised. Insiders from all three parties told Maclean’s that Conservative support ran deep among all income levels. That included the working poor, many of whom apparently resented the fact that the combined value of social assistance payments and benefits in Ontario often exceeds their take-home pay. And while more men supported the Conservatives than women, by the end of the campaign the gender gap had narrowed to a few percentage points in private party polls. At the same time, the Tories enjoyed almost equal support among all age groups. Said defeated Toronto Liberal candidate David MacNaughton: “There are two messages here. Don’t underestimate the right-wing populism in this country. And don’t underestimate the anti-government feeling.”

It was not supposed to work out that way when Bob Rae called the election on April 28. Then, the Liberals appeared so securely in first place that most party stalwarts were totally unprepared for any shift in the public mood. Private party polls on the brink of the election, and public polls during the 18 months prior to the election, indicated that roughly half of all the decided voters favored the Liberals. The Tories

had 30 per cent. The NDP held 20 per cent. It did not seem that much could change in seven weeks.

But that complacent assumption dangerously underestimated the Tories’ readiness for battle—and the wide-ranging appeal of their platform. The party first released its 21-page booklet, The Common Sense Revolution, in May, 1994—and then sent Harris around the province in a bus to publicize it. Not much happened. The party’s position in the polls scarcely budged. But, over the next year, the Tories honed their message to three themes: an end to employment equity: work for welfare; and a package of tax cuts, spending cuts and a balanced budget. Harris became comfortable defending his policies. Behind the scenes, a core of fervent strategists, led by Long, worked out a series of “wargame” scenarios in the summer of 1994, predicting where they would stand during each week of the campaign.

Some of their tactics were nothing short of brilliant. Calculating that their only serious opponents were Liberals, the party created dozens of short “attack” videos tailored to individual ridings. If the local Tory was facing a Liberal incumbent, the footage showed that incumbent and McLeod as they voted for tax increases. If there was no Liberal incumbent, the video showed McLeod and former Liberal premier David Peterson as they approved tax hikes.

The yearlong secret effort paid off. Midway through the campaign, the Tories sent out 200,000 copies of those videos across the province. Sixty-six candidates took advantage of them, handing cassettes out at the door and using them at rallies.

Sixty of those candidates won.

Such preparation ensured that, as the strategists say, the Tory themes began to “bite” at the door. During the first two weeks of the campaign, the Liberals concentrated their attacks on the NDP, reasoning that most NDP votes would go to them. The NDP, in turn, attacked the Liberals because they were the front-runners. Largely ignored by his opponents, Harris concentrated on his themes, dedicating the entire second week to a full-scale attack on the current social assistance system. Within days, his ads began to contrast his position on employment equity and welfare with what he portrayed as the Liberal position, leaving the impression that his opponents would do little to change the system. Five days before the May 18 televised leaders’ debate, Liberal support began to trickle to the Tories: according to Liberal strategists, each night, a single percentage point or sometimes two percentage points would shift. Support levels stabilized for four nights after the debate. Then, they started to erode again. And they never stopped.

The Liberals were paralyzed—because of their own poor planning and their internal divisions. After many soul-searching debates, the party had decided to go into the campaign with an 82-page Red Book, similar to the book that Prime Minister Jean Chrétien deployed so effectively during the 1993 federal election. In hindsight, of course, Chrétien’s plan worked because voters perceived his Conservative opponent, Kim Campbell, as lacking a plan. In contrast, McLeod went up against Harris’s focused campaign with a hodgepodge of 142 promises, including the extension of GO-train service from Toronto to Peterborough and the nomination of a minister responsible for children’s services. As former federal Liberal cabinet minister Doug Frith, who campaigned in a suburban Toronto riding, said: “The Red Book was an albatross. I kept saying that part of the problem we had was that, if you closed your eyes, you knew exactly

As Harris began to surge in the polls, his NDP opponent came back to life

what Harris stood for: those three issues. If you closed your eyes again, you couldn’t name the three issues that Lyn was on.”

The Liberals were also unable to react quickly to Harris’s onslaught. Insiders told Maclean’s that, although the party’s pollster, Michael Marzolini, was highly accurate, he occasionally submitted the results of overnight polling at noon, rather than first thing in the morning. That made it more difficult to react quickly to shifting events. Moreover, while Tory ads ran, night after night, pummelling the Liberals’ positions, the Liberals continued to run soft ads, which depicted pages from the Red Book. Insiders say that Marzolini adamantly maintained that negative ads did not work. By the time that Liberal strategists finally overruled him, it was too late. Two negative Liberal ads aired eight days before the election. Liberal polls showed that those ads hurt Harris’s credibility—but it was too late to shift his support.

Then again, none of the three party leaders had much credibility to begin

with. When the campaign began, the

leader who enjoyed the highest public regard was Rae. But 59 per cent of decided voters told Liberal pollsters before the election that they would not vote for the NDP under any circumstances. NDP strategists were well aware of that antipathy. For the first few weeks of the campaign, they took perhaps the only approach they could take: they defended their record. In speech after speech, Rae discussed his controversial public-sector wage cuts, his decision to scrap plans for public auto insurance and his initiatives to stop the growth of the health-care budget. Said provincial secretary Jill Marzetti: ‘There had to be some element of letting people express some anger, or go through a catharsis, before we could talk to them about the good things we had done.”

The result, however, was a curiously lacklustre campaign. Some strategists privately complained that the party needed to find something, anything, to galvanize its troops and its leader. Instead, day after day, a clearly resigned Rae sombrely reflected on his fate and his

times. Then, Harris began to surge in the polls, and Rae came back to life. During the last few weeks of the campaign, he hammered Harris, day after day. “We are talking about defending our way of life in this province in the face of this radical right-wing agenda,” he said. On election night, with his wife, Arlene Perly Rae, quietly weeping beside him, he told reporters that he was troubled by Harris’s win. “You can always drive 70 per cent of the people to turn on 30 per cent,” he said. “It is not difficult if you push the right buttons.” Then, he predicted that Harris would have difficulty when he tries to implement his agenda: “You have to govern Ontario from the centre. You can’t govern with ideology on your shoulders.”

On policy matters, however, there is little chance that Harris will take Rae’s advice. The new premier has vowed to call a summer legislative session, to take immediate steps to reduce the number of government employees and to scrap the NDP’s labor legislation before the end of the year. Workfare should be in place by April 1,1996— the start of the government’s new budgetary year and the day that federal restrictions on such measures disappear. (Currently, federal funds cannot be used to support programs that require welfare recipients to work.) As Harris said on election night: “You have elected us as your agents of change, and I want to tell you that we will keep that faith. We will deliver.”

Despite those brave words, Harris may have promised an economic miracle that no one can deliver. The premier-designate has calculated that he can cut $6 billion from public services and $4.7 billion from taxes by 19981999. He has also promised to balance the budget, with a slight surplus, by the fiscal year 2000-2001.

Such long-term projections are risky.

Although the campaign bogged down in an incomprehensible welter of numbers, as each party released estimates purporting to show what it and its opponents would do, one thing is clear: the Tories do not expect a recession. In their calculations, real growth continues, unabated, through the magical balancing year of 2000-2001.

If growth slips or if revenues are not up to expectations, the Tories will be in danger of running up enormous deficits. Alternatively, they may confront the need for higher-than-expected cuts in services. Harris has always proclaimed that he will protect three priority areas: health care, education inside the classroom and law enforcement. If his projections are off, he might not be able to preserve those sectors. Ironically, many voters do not actually expect Harris to deliver the promised 30-per-cent cut in personal income tax rates: polls indicated that only one in five voters believed that any leader would keep his or her vows.

Such cynicism does not bode well for any politician in the long term. In the meantime, the spotlight is on Mike Harris. His campaign manager Long said that the new premier has the backing of the “silent majority” of voters who want real change, real fast. Now, they are going to get it. And every politician in every province is going to scrutinize Ontario to see whether the people enjoy the ride.

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